In Singapore, a Divorce Property Settlement can be complex, especially when a home loan and property ownership are involved. The outcome often depends on whether someone owns an HDB flat or a private property, and on how they finance the loan. Here’s a breakdown to guide you through the key considerations.
🔑 Key Considerations in Divorce Property Settlement
Ownership structure
- Joint ownership: The divorce process will decide if one person keeps the property, both sell it, or if ownership changes.
- Single ownership: The Court evaluates financial contributions and housing needs before making a decision.
Outstanding mortgage loan
- Regardless of divorce, the bank (or HDB) requires repayment.
- If both people share the loan, they both hold responsibility for the monthly payments until they fully pay it off.
CPF monies used
- If someone used CPF funds to buy the property, the seller may need to pay back their CPF Ordinary Account (OA) with interest. This is unless there are exemptions.
🏠 HDB Flats and Divorce
Minimum Occupation Period (MOP)
Before MOP:
- Sell the flat in the open market (with HDB’s approval).
- Return the flat to HDB (subject to discretion).
After MOP:
- One party may take over the flat if eligible (as a single or with children).
- If not, someone usually sells the flat and divides the proceeds (after loan redemption and CPF refund) as per the Court order.
🏢 Private Property and Divorce
Unlike HDB flats, private properties do not have MOP restrictions. Options include:
- One party buys over the other’s share (subject to the bank’s assessment of affordability and MAS loan rule).
- To sell the property, first repay the mortgage. Then, refund the CPF money used. Finally, split the remaining money as the Court decided.
⚖️ Role of the Courts in Divorce Property Settlement
The Family Justice Courts handle the division of assets under the Women’s Charter. Importantly, division is not always a 50-50 split. The Court considers:
- Financial contributions (e.g., paying the mortgage, renovations).
- Non-financial contributions (e.g., caregiving, homemaking).
- Future needs of both parties and their children.
📌 Practical Steps if You’re Divorcing
- Check mortgage liability – confirm whether you’re joint borrowers.
- Contact your bank or HDB – enquire about loan redemption, restructuring, or transferring the loan to one name.
- Seek valuation – understand your property’s current market value.
- Review CPF implications – assess refund requirements and any potential cash shortfall.
- Get legal advice – property division is legally complex, and mistakes can be costly.
If you’re facing a Divorce Property Settlement, seek professional advice. Our mortgage broker can help you assess your mortgage and guide you in restructuring your property loan during a complex divorce.